Global exchange-traded funds (ETFs) tracking individual countries can be used as an substitute for sector investing, according to research from Standard & Poor’s (S&P), ETF Trends reports. Investors can gain more exposure to specific industries through ETFs following single-country benchmarks. These funds can also offer a good diversification tool within a portfolio. Country ETFs may provide investors geographic expansion in their portfolios away from U.S. equities, with the added advantage of high concentrations in select sectors, said S&P analyst Kenneth Leon in a note. Certain country ETFs can be seen as more defensive, with holdings concentrated in consumer staples, healthcare, telecom and utilities, while other country ETFs may have high concentrations of holdings in the financial or energy and material sectors, he added.

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